My weekly notes on banking and financial services –
by Aivars Jurcans
Done! And Done
Norwegian Air Shuttle has sold its 17.5% stake in Norwegian Finans Holding, the owner of Bank Norwegian, to Cidron Xingu Limited for USD 246.7 million.
Intact Financial Corp, a Canadian property and casualty insurer, has agreed to acquire The Guarantee Co of North America, a provider of specialty insurance, surety and personal insurance, and Frank Cowan Co, a managing general agent which acts as an intermediary between an insurance company and clients, from Princeton Holdings for USD 750.6 million in cash.
Deals On the Table
Goldman Sachs is said to be seeking regulatory approval to increase its stake in Goldman Sachs Gao Hua Securities from 33% to 51%. At present the majority interest in the JV belongs to Beijing Gao Hua Securities, owned by a veteran Chinese banker Fang Fenglei and Legend Holdings.
Source: Bloomberg, Reuters, FT
Cigna, a US health insurer, is said to be exploring a sale of its group benefits insurance business. The potential transaction value could be as much as USD 6 billion.
Tilney, a UK asset manager (founded in 1881) owned by Permira (a buyout group) is said to be in talks over a potential merger with Smith & Williamson, another asset manager (founded in 1836). A combined entity would become one of the largest wealth managers in the UK with GPB 45 billion in assets under management.
Source: FT, Bloomberg
Thailand’s central bank is said to be considering selling as much as 54.4% of the total capital in Bangkok Commercial Asset Management (the country’s biggest distressed assets manager) in an initial public offering. Central bank currently owns “almost the entire company”.
Vietnamese government is said to be considering selling as much as 35% of shares in Vietnam Bank for Agriculture and Rural Development by the end of 2020.
Metrics To Watch
OneSavings Bank’s, a UK specialist lender, net interest margin dropped to 2.78% in H1 2019, from 3.01% a year ago. Charter Court, another specialist lender, reported a decrease from 3.08% to 3.04%.
Berlin HYP, a German lender, has sold EUR 1 billion in mortgage-backed bonds with a yield of minus 0.59%, the most deeply negative yield on record. The company became the first non-state entity to sell a euro-denominated bond with a sub-zero yield.
Root Insurance, a Columbus, Ohio, based tech enabled seller of auto insurance through a mobile app, is said to be finalising a USD 350 million funding round that would value the company at USD 3.65 billion. Root Insurance earned USD 133.4 million in insurance premiums in H1 2019.
On the Baltic Shores
The European Central Bank closed down PNB Banka, a Latvian lender with EUR 500 million in assets and EUR 472 million in customer deposits, because “the need for additional impairments of its assets led to a significant deterioration in its capital situation to the point that the bank’s assets were less than its liabilities”.
According to the World Bank, about 1.7 billion people remain “unbanked”, meaning they do not have access to a financial institution or a mobile money provider.
A Thought Worth Noting
“Fintechs are pretty slim in their product offering. Right now, they’re surviving on user growth rather than being great businesses.”
Kim Fournais, CEO and co-founder, Saxo Bank
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Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.
Photo by Daria Shevtsova on Unsplash